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Assume that the savings function is of the form S = - 100 + (0.2)YD and the marginal income tax rate is t = 0.25. What would be the effect on the equilibrium level of output if autonomous consumption changes by DCo = - 50?

A. a decrease in output of 400
B. a decrease in output of 250
C. a decrease in output of 200
D. a decrease in output of 125
E. a decrease in output of 100

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If the savings function is of the form S = - 200 + (0.1)YD and the marginal income tax rate is t = 0.2, an increase in income of 200 will increase consumption by

A. 180
B. 144
C. 80
D. 72
E. 20

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Assume a model with an income tax rate of t = 0.25 and a marginal propensity to consume of c = 0.8. What could cause the level of equilibrium income to decrease by 1,000?

A. a decrease in autonomous net exports of 400
B. a decrease in autonomous saving of 200
C. a decrease in government purchases of 250
D. a decrease in government transfer payments of 500
E. an increase in autonomous investment of 500

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The size of the expenditure multiplier depends on

A. the marginal propensity to consume
B. the marginal propensity to import
C. the marginal income tax rate
D. all of the above
E. only A) and B)

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In a simple model with no government or foreign sector, a decline in investment of $10 billion will lead to a $50 billion decline in the equilibrium level of income if

A. the mps is 0.2
B. the mpc is 0.5
C. the ratio of total consumption to total income is 0.8
D. changes in consumption divided by changes in income equal 0.2
E. changes in saving divided by changes in income equal 0.8

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Assume that the savings function is of the form S = - 100 + (0.2)YD and the marginal income tax rate is t = 0.25. What would be the effect on the equilibrium level of output if autonomous consumption changes by DCo = - 50?

A. a decrease in output of 400 B. a decrease in output of 250 C. a decrease in output of 200 D. a decrease in output of 125 E. a decrease in output of 100

If the savings function is of the form S = - 200 + (0.1)YD and the marginal income tax rate is t = 0.2, an increase in income of 200 will increase consumption by

Assume a model with an income tax rate of t = 0.25 and a marginal propensity to consume of c = 0.8. What could cause the level of equilibrium income to decrease by 1,000?

The size of the expenditure multiplier depends on

In a simple model with no government or foreign sector, a decline in investment of $10 billion will lead to a $50 billion decline in the equilibrium level of income if

A. a decrease in output of 400
B. a decrease in output of 250
C. a decrease in output of 200
D. a decrease in output of 125
E. a decrease in output of 100